ISG has seen a 拢74m drop in turnover as its construction division puts the brakes on recovery

ISG is recruiting in every division except construction, as it predicts a 10% drop in regional work over the next six months.

The firm recorded revenue of 拢972m for the year ended 30 June 2010, down from 拢1,046m in 2009. Pre-tax profit was 拢8.7m, down from 拢11.8m in 2009.

The annual report also revealed an order book totalling 拢742m, compared with 拢822m last year, which comprises only 30% public sector work overall. But its regional construction business, which accounts for a third of the firm鈥檚 turnover, is weighted 62% towards the public sector.

David Lawther, chief executive of the firm, said: 鈥淚n terms of this current year, the second half will see a 10% decline for the regional business. We are seeing the odd ready scheme starting to come back in the regions, but obviously there is the public sector issue.鈥�

He said that the firm will reallocate workers, but would not discuss potential redundancies. The regional construction division recorded a revenue of 拢338m (2009: 拢367m) and an operating profit of 拢3.5m (2009: 拢3m) up to 30 June 2010, due to increased margins. It has an order book of 拢276m, compared with 拢286m at this point in 2009.

The London construction business recorded an operating profit of 拢2.2m (2009: 拢1m) on a revenue of 拢154m (2009: 拢217m). Lawther said that, unlike the regional business, the London division is 鈥渉eavily weighted鈥� towards the private sector, though he doesn鈥檛 anticipate an upturn until the second half of 2011.

He continued: 鈥淥verall we will be adding numbers to the business, as we鈥檙e recruiting in food retail, bank retail, London fit-out, Europe and Asia. Construction is the only business that we鈥檙e not recruiting in and yes it鈥檚 going to have a hard time.鈥�

ISG also has a joint venture in the Middle East, split between joinery and fit-out, for which the turnover is not reported, but Lawther described as 鈥渓ess than 拢20m鈥�.

The firm is currently swapping its share of the joinery business to take total control of the fit-out business, as it anticipates rising workloads in the region.

Lawther said: 鈥淎bu Dhabi is creating a new financial centre which is being built at the moment. We鈥檇 expect to see opportunity from that in the next 18 months, as well as in Qatar. And Dubai has started to come off the bottom now.鈥�

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